In the latest market close, Spotify (SPOT) reached $699.11, with a -1.85% movement compared to the previous day. The stock's change was less than the S&P 500's daily gain of 0.09%.
The music-streaming service operator's stock has climbed by 9.87% in the past month, falling short of the Computer and Technology sector's gain of 11.17% and outpacing the S&P 500's gain of 7.21%.
Analysts and investors alike will be keeping a close eye on the performance of Spotify in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $2.27, marking a 58.74% rise compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $4.79 billion, indicating a 16.93% growth compared to the corresponding quarter of the prior year.
SPOT's full-year Zacks Consensus Estimates are calling for earnings of $9.72 per share and revenue of $19.94 billion. These results would represent year-over-year changes of +63.36% and +17.6%, respectively.
It is also important to note the recent changes to analyst estimates for Spotify. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 1.63% downward. Spotify is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Spotify has a Forward P/E ratio of 73.27 right now. This indicates a premium in contrast to its industry's Forward P/E of 29.83.
We can additionally observe that SPOT currently boasts a PEG ratio of 1.78. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Internet - Software industry stood at 2.39 at the close of the market yesterday.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 57, which puts it in the top 24% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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Spotify Technology (SPOT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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